IBANYS End of Session Update
Government Relations Call --
June 26, 2017

June 26, 2017

IBANYS' Government Relations Committee met by conference call this morning. We heard a federal update from John Hand of ICBA, and a state update from IBANYS legislative counsel Bill Crowell. 

State Update
IBANYS Legislative Counsel Bill Crowell reported that the  New York State Legislature has adjourned its regularly scheduled 2017 session, although it will likely need to return for a special session to address such several large scale issues as NYC Mayoral control of schools and the issue of county tax expiration deadlines in September. However, we do not at this time anticipate that a special session would focus on any specific issues impacting community banks. Overall, the 2017 session was a positive one for community banks -- including the passage of IBANYS-generated proactive legislation, and "playing defense" to stop initiatives that would have had a significant negative impact on our industry. 
  • IBANYS was once again successful in battling back a proposal that would have allowed tax-exempt credit unions to participate in the State Business Development District program, and therefor be allowed to receive real property tax breaks and to take municipal deposits. The legislation (A.6946, Zebrowski/S.5308, Hamilton) was introduced by the two legislative Banks Committee Chairs, Sen. Jesse Hamilton (IDC-Brooklyn) and Assemblyman Ken Zebrowski (D-Rockland County). We were successful despite the fact that for the first time ever, the initiative had the support of the NYS Department of Financial Services (DFS) and the Governor's office. While the bill passed the Assembly by a vote of 126-17, it did not make it to the floor of the State Senate. IBANYS thanks our member banks from around the state who responded to our requests and contacted state legislators on the importance of this issue. However, it is clear that this issue continues to be a high priority for the credit union industry, and will most certainly resurface next year. Tax-exempt credit unions have for years been seeking entry into the business of municipal deposits in three areas: The BDD, the State Community Bank Deposits Program, and the general broad permission to enter the business across the board. IBANYS will be continuing our dialogue with DFS and the legislature to stress the fact that tax-paying community banks, which take municipal deposits and re-invest them in their communities through small business, consumer and housing loans, would be severly impacted by allowing their tax-exempt credit unions to compete for these deposits, which often represent a significant percentage of the community banks' total deposits. . .
    CLICK HERE to read IBANYS' Memo in Opposition to this bill. . .
    Meanwhile, there was also an attempt to allow low-income credit unions in New York City to participate in the program, but that was also stopped..
  • We are also pleased both the State Senate and Assembly passed IBANYS-generated legislation to extend the state examination cycle for community banks from 12 months to 18 months, and to extend the threshold from $250 million in assets to under $1 billion. This was one of IBANYS' top legislative agenda priorities the past three years, and we worked closely with the legislative Banks Committee chairs and members, and with DFS, to help draft the language and then advance the bill to final passage. The language in the legislation was amended to revise "shall extend" to "may" extend, and DFS supported the legislation.The legislation now goes to the Governor for his signatutre, and IBANYS will encourage that he do so. 
  • On other matters, a Task Force was established to study the issue of regulating online lenders -- an issue originally addressed in the Governor's Budget proposal but left unresolved. He updated on the issue of a realtors supported bill that would require savings accounts to be established for first-time home buyers, with a cap of $100,000.
  • IBANYS' supported bills that would have 1) established community bank service corporations, and 2) provided a community bank exemption CRA exam exemption to institutions that had achieved at least a satisfactory rating from their primary federal regulator were both passed by the Senate but not the Assembly.
  • This session, the Legislature explored legislation regarding  convenience accounts as a vehicle to address the issue of  financial abuse of the elderly. S.5810 (Serino) passed The Senate passed a bill (S.5810) that would
    require banks to offer convenience accounts when a joint account is opened, and  to provide information about how they differ from one another.  The Assembly also passed a bill (A.8217A) that varied slightly. This is an issue that will likely resurface in 2018.
Federal Update

  • ICBA's John Hand reported that the House has passed the Financial CHOICE Act -- the regulatory relief (so-called "repeal and replace" of Dodd-Frank). However, it did not include the provision repealing the Durbin Amendment. 
  • In the Senate, the focus will be more on the CLEAR Regulatory Relief Act, which is a smaller, more targeted approach that would provide regulatory relief to community banks, mand of the provisions of ICBA's Plan for Prosperity platform that is endorsed by IBANYS. 
  • On the issue of flood insurance, John noted the House Financial Services Committee had recently marked-up flodd insurance legislation. The current Act expires September 30, but could  be extended. 
  • The CFPB's is moving ahead on its plan for small business data collection from banks (the "HMDA of small business lending"), and ICBA's intent to monitor and respond.  
  • President Trump has nominated candidates for Comptroller of the Currency (Joseph Otting) and FDIC Chairman (James Clinger), and will be moving forward in naming candidates for vacancies at the Federal Reserve and eventually the CFPB.

IBANYS thanks all of our member institutions for their continued support of and participation in our government relations efforts. 

Stephen W. Rice
Director of Government Relations & Communications
Independent Bankers Association of New York State